New York Attorney General Eric Schneiderman is investigating Standard & Poor's to determine whether it failed to follow its own methodology in rating commercial-mortgage bonds (CMBS) in order to win business from banks, according to two people with knowledge of the matter.
The unit of McGraw Hill Financial Inc. is facing scrutiny on six such deals it graded in 2011, said the people, who asked not to be identified because the probe hasn't been made public. Ed Sweeney, a spokesman for S&P in New York, declined to comment, as did Matt Mittenthal, a spokesman for Schneiderman.
The New York Attorney General's office is at least the third government agency investigating S&P's business of grading commercial mortgage-backed securities, in which banks pool together loans on properties such as shopping malls, hotels, and skyscrapers to create securities that are sold to investors.
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